2012 (1) TMI 400 - AT - Income Tax

Tribunal upholds CIT(A) decision on late PF contribution, directs AO to verify payment date

The Tribunal upheld the CIT(A)'s decision to delete the addition under sections 36(1)(va) and 2(24)(x) of the Income Tax Act for late deposit of ... Deductibility of employees' provident fund and ESI contributions paid after due date - disallowance under sec. 36(1)(va) read with sec. 2(24)(x) in relation to late deposit of employees' contribution - application of amended Section 43B retrospectively - payment within the due date for filing return under sec. 139(1) as condition for deductionDeductibility of employees' provident fund and ESI contributions paid after due date - disallowance under sec. 36(1)(va) read with sec. 2(24)(x) in relation to late deposit of employees' contribution - payment within the due date for filing return under sec. 139(1) as condition for deduction - application of amended Section 43B retrospectively - Remand to the Assessing Officer to verify whether employees' contributions were paid within the due date for filing the return of income under section 139(1); deletion to follow if so. - HELD THAT: - The Tribunal noted that the CIT(A) deleted the addition made by the Assessing Officer for delayed deposit of employees' contribution to Provident Fund and ESI, relying on Supreme Court decisions holding that the amendment to the second proviso to Section 43B is curative and retrospective. The Tribunal observed that the position is supported by the jurisdictional High Court decision which held that amounts paid by employees' contribution beyond the due date are deductible by invoking the amended provisions of Section 43B. In view of these authorities, the Tribunal did not adjudicate the merits afresh but directed a factual verification by the Assessing Officer as to whether the payments were made within the due date for filing the return under section 139(1). If the payment dates fall within that due date, the addition is to be deleted in full; otherwise, appropriate action may follow. [Paras 3]Matter remitted to the Assessing Officer to verify payment dates and delete the addition in full if payments were made within the due date for filing the return under section 139(1).Final Conclusion: The revenue appeal is allowed for statistical purposes and the matter is remitted to the Assessing Officer for verification of payment dates; if payments were made within the due date for filing the return under section 139(1), the disallowance shall be deleted. Issues involved: Appeal against CIT(A)'s order deleting addition u/s. 36(1)(va) read with sec. 2(24)(x) of the Income Tax Act, 1961 for late deposit of employees' contribution to PF.Summary:The appeal by revenue challenges the CIT(A)'s decision to delete the addition made u/s. 36(1)(va) read with sec. 2(24)(x) of the Act regarding late deposit of employees' PF contribution. The Assessing Officer disallowed the amount for delayed payment, but the CIT(A) ruled in favor of the assessee, citing precedents and directing the deletion of the disallowance. The issue was found to be covered in favor of the assessee by a decision of the jurisdictional High Court. The Tribunal remitted the matter back to the Assessing Officer to verify if the payment was made within the due date of filing the return. If so, the addition should be deleted in full. The appeal of the revenue was allowed for statistical purposes.In conclusion, the Tribunal upheld the CIT(A)'s decision to delete the addition made u/s. 36(1)(va) read with sec. 2(24)(x) of the Act for late deposit of employees' PF contribution, based on the payment being made before the due date of filing the return.